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Consumer Demand for Pork Influences Profitability

14 January 2014
Manitoba Pork Council


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US - Demand will play a key role in the profitability of pork producers throughout 2014 according to an agricultural economist with the University of Missouri, Bruce Cochrane writes.

As a result of dramatically lower feed costs and stable live hog prices US pork producers are expected to see improved profitability throughout 2014.

Dr Ron Plain, an agricultural economics professor with the University of Missouri, notes history has shown when hog producers make money they tend to save gilts and expand the breeding herd and, according to USDA's December inventory report, producers expect to farrow about 1.3 per cent more sows in the first half of 2014 than a year ago.

Dr Ron Plain-University of Missouri

Consumers need to have money and be willing to buy the product.

The last several years demand growth has been stronger in the export market than in the domestic market.

The US economy hasn't been doing very well and so that's given us a rather weak demand picture.

It's improving and it looks like a little more improvement in 2013 and hopefully that will carry over.

But exports, like I said, has been a stronger growth area than domestic demand and we're expecting to see a little bit of an increase in US pork exports in 2014 compared to last year but not a dramatic improvement.

Dr Plain notes death losses due to Porcine Epidemic Diarrhea are very high in baby pigs so even though farrowing is trending upwards the number of pigs produced in the United States in the coming year is expected to be very close to what we had in 2013 but, because weights are likely to go up, there will probably be a little bit more pork in 2014.

He expects hog prices to stay very close to year ago levels and feed prices to average much lower, especially in the first half of the year so, if producers can keep pigs healthy, 2014 should be a profitable year.

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